Gist Of Rajya Sabha TV (RSTV): Consumer Protection Bill

Introduction

The Parliament had passed the Consumer Protection Bill, 2019 which aims to protect the rights of consumers by establishing authorities for timely and effective administration and settlement of consumers’ dispute. The Bill will replace the more than three decades old Consumer Protection Act, 1986.The new legislation is expected to ease the overall process of consumer grievance redressal, provide a better mechanism to dispose consumer complaints in a speedy manner and will help in disposal of large number of pending cases in consumer courts across the nation.

Edited excerpts from the Debate

Question - What has been the journey of Consumer Protection Framework in India till now?

• Till now, the Consumer Protection Act, 1986 enforces the rights of consumers, and provides for redressal of their complaints. The Act also recognises offences such as unfair trade practices, which include providing false information regarding the quality or quantity of a good or service, and misleading advertisements.
• However, over the years, there have been challenges in the implementation of the Act like unawareness among the consumers of their rights and extensive delays in resolving a consumer case. Also, the Act does not address consumer contracts between a consumer and manufacturer that contain unfair terms. 
• In this context, the Law Commission of India recommended for a separate law to address these major concerns.
• Therefore, in 2011, a Bill was introduced to enable consumers to file online complaints, and against unfair terms in a contract. But, the Bill got lapsed with the dissolution of the 15th Lok Sabha.
• Then, the Consumer Protection Bill, 2015 was introduced to replace the 1986 Act.
• The Bill was examined by the Standing Committee on Consumer Affairs gave several recommendations with regard to the various provisions of the bill. But it was also not passed by the parliament.
• Then, the Consumer Protection Bill, 2018 was introduced to replace the 2015 Bill but it got lapsed with the 16^th Lok Sabha.
• Finally, the Consumer Protection Bill 2019 has got the Parliamentary nod.

• Definition
  • A consumer is defined as a person who buys any good or avails a service for a consideration. It does not include a person who obtains a good for resale or a good or service for commercial purpose.
• Consumer Complaints
  • The Bill sets up Consumer Disputes Redressal Commissions (consumer courts) to hear complaints by the consumers.
  • These Commissions will be set up at District, State and National level, with pecuniary jurisdiction up to Rs 1 crore, Rs 1 crore to Rs 10 crore, and above Rs 10 crore, respectively.
  • The District Commissions will consist of a President and at least two members. The State and National Commissions will consist of a President and at least four members.
  • Appeals from the District Commissions will be heard by the State Commission, and from the State Commission by the National Commission. Appeals from the National Commission will be heard by the Supreme Court.
  • The Commissions will attempt to dispose a complaint within three months, if the complaint does not require analysis or testing of commodities. If analysis and testing is required, the complaint will be disposed within a period of five months.
  • The Bill sets up the Central Consumer Protection Authority (CCPA) to promote, protect, and enforce the rights of consumers as a class.
• Product Liability
  • The Bill allows a person to make a claim of product liability against a manufacturer, seller, or service provider for any defect in a product or deficiency in a service
• Unfair contracts
  • A contract is said to be unfair if it causes significant change in the rights of the consumer like demanding excessive security deposits, imposing a disproportionate penalty for a breach in contract etc.
  • The State and National Commissions may determine if the terms of a contract are unfair and declare such terms to be null and void.
• Unfair and restrictive trade practices
  • An unfair trade practice includes making a false statement regarding the quality standard of a good or service or selling of goods not complying with standards etc.
  • A restrictive trade practice is one that imposes unjustified costs or restrictions on consumers, including delays in supply that lead to increase in price or requiring purchase of certain goods or services as a condition for procuring any other goods or services etc.
  • The CCPA may take steps to prevent and discontinue unfair and restrictive trade practices.
• Penalties
  • If a person does not comply with the orders of the District, State or National Commissions, he may face imprisonment up to three years, or a fine not less than Rs 25,000 extendable to Rs one lakh, or both.

Question - How this bill is a game changer in the arena of Consumer Protection in India?

• There were no provisions for the regulation of E-commerce industry in the earlier act since this industry has taken shape in last two decades only. The bill is a comprehensive legal proposal which puts in place liability of the e-commerce platform regarding the products shipped by them and ensures speedy grievance redressal.
• Earlier, the Monopolistic and Restrictive Trade Practices Act (MRTP), 1969 used to be the watchdog of the unfair trade practices but when MRTP gave way to Competition Commission of India (CCI), it did not had the jurisdiction to deal with the unfair trade practices. Since then this was a big lacunae in protecting the consumer rights. The Central Consumer Protection Authority (CCPA) provided in the bill will play a very powerful role in addressing this lacunae.
• Now, the complaints could be filed in online mode This will enhance the reach of consumers to the justice delivery system.
• The mediation cells provided by the bill will reduce the burden of cases in the judiciary. Moreover, it will save the resources of the consumers which they would have otherwise spent in battling for the justice in the consumer courts.

Question - What are the issues in the bill that needs to be discussed?

• Violation of Separation of Powers: The power of deciding the qualifications of the President and members of the Commissions have been given to the central government and the bill itself does not mention any minimum judicial qualifications. In such a case, even executive members could be holding the judicial posts. This is against the principle of separation of powers.
• Impact on Judicial Independence: The central government is authorized to notify the method of appointment of members of the Commissions. There is no involvement of higher judiciary in the selection. Allowing the executive to determine the appointment of the members of Commissions could affect the independent functioning of the Commissions.
• Avoiding Other Committees: The Standing Committee that examined the Consumer Protection Bill, 2015 gave several recommendations which have not been incorporated in the bill.

Way Forward

• The government should setup state of the art laboratories in all the states so that reports about the products challenged in the courts are of uniform standard and correctness.
• The bill should also provide for the consumers to fight the cases without the help of lawyers because the compensation which the consumer gets consumed in paying the fee of lawyers.

Question - Explain the evolution of Consumer protection in India and examine how it is a sine-qua-non for Good Governance?

Question – Critically examine how far the Consumer Protection Act 1986 has been successful in ensuring consumer protection in India. Also discuss how Consumer Protection Bill 2019 attempts to improve the existing consumer protection regime in India.